Ukraine insists that the planned price rise is politically motivated, in the wake of Kiev's Orange Revolution and the election of its pro-Western President, Viktor Yushchenko.

In his New Year speech, Mr Yushchenko did not refer to the dispute directly but, looking back at the past year, said his country had defeated dictatorship and it was now time to work towards Ukraine's economic independence.

Other countries which remain in Russia's sphere of influence continue to receive gas at below-market prices.

Mr Yushchenko has said Ukraine is currently prepared to pay no more than $80 per 1,000 cubic metres of gas.